What COVID-19 means for food systems and meat packing

"The most immediate impact of these plants shutting down will be on the farmers who depend on these plants as their primary way of accessing markets. In some cases, producers can divert their animals to other processing plants, but this increases costs and might also decrease returns"

Fresh produce at the wholesale market area run by Koornneef Produce Ltd. at the Ontario Food Terminal. Toronto, Canada. April 18, 2019. Nick Kozak/For the Toronto Star.

As the global pandemic has unfolded over the last month, people have become concerned about the security and resilience of our food systems. For instance, on both sides of the Canada-U.S. border enormous meat-packing plants have closed as workers test positive for COVID-19. This even provoked a comment by the Prime Minister who said that the federal government is monitoring the situation “very, very carefully.”

The impact of the virus on the meat processing industry is significant for two reasons. The first reason relates to how the plants are physically configured to optimize efficiency and this means it is very difficult to physically isolate plant workers without seriously compromising the output capacity of the plant. Not only are these plants difficult to reconfigure for social isolation, these plants often bus workers from urban centres and so while the plants need to be built outside of the city, they also need a lot of workers from within the city.

The second key point is that over the past two decades, many of North America’s smaller meat-packing plants, which traditionally would have fed regional markets, have closed in favour of much larger, more centralized, operations that operate at much higher economies of scale. These plants concentrate in areas of significant production. Hence, we see this industry coalescing into a couple of key locations that, if they close, can send major ripples throughout the industry. These two factors — their centralization and the difficulty of social isolation in the plants — means that this part of the food system is a real bottle neck in case of disruption.

The most immediate impact of these plants shutting down will be on the farmers who depend on these plants as their primary way of accessing markets. In some cases, producers can divert their animals to other processing plants, but this increases costs and might also decrease returns. If they are unable to sell into the meat-packing industry, beef and pork farmers will quickly run out of space to hold animals and could eventually face an extremely difficult decision of needing to euthanize parts of their herd. With that said, culls are more likely in the pork industry given the higher volume and shorter production cycle of hogs and the continuous flow process that means new animals are coming through the system to use the space as animals are shipped for processing. Beef farmers will be able to hold animals for a while longer, but, of course, this will cost money and hurt farm income.

There is also likely to be knock on effects for consumers further down the line as lower capacity in the meat processing industry translates into lower inventories, lower supplies, and higher prices. Food price inflation, therefore, is a potential outcome of the current situation if plant closures are long term and more plants are closed. If this problem persists it could result in higher meat prices for many months to come. With that said, consumers should not panic by racing to the grocery stores to stock up on meat. As witnessed early in the pandemic, a race on grocery stores’ inventory can empty shelves very quickly and, thus far, our food system has proven remarkably adaptable to the disruptions caused by COVID-19

For low income Canadians, however, the double blow of unemployment and lost wages in combination with higher food prices may be particularly problematic. Food bank use has skyrocketed around the country and we are expecting unemployment to reach historic highs. And Canada already had a major food security problem with 4.4 million Canadians having experienced food insecurity in the past year. When these points are taken together, food price inflation caused by COVID-19-related disruptions plus soaring unemployment could exacerbate Canada’s already existing food security crisis.

Over the next few months, therefore, disruptions in the food supply chain is likely to primarily hurt farm incomes and lead to food price inflation that affects lower income Canadians, and folks who have seen wages decline, the most. In the longer term, one of the pandemic’s legacies may be to provoke a more critical conversation about the nature of our food system. COVID-19 has exposed a number of vulnerabilities in our system. With that said, the system we’ve enjoyed is highly efficient and in some ways it is this very efficiency that makes it vulnerable. So maybe one legacy of the pandemic will be to provoke a conversation about our food system that focuses on the best way of balancing efficiency and resilience.

Evan Fraser is the director of the Arrell Food Institute at the University of Guelph. Mike Von Massow is the chair in food system leadership with the University of Guelph’s Department of Food and Agricultural Resource Economics.

The views, opinions and positions expressed by all iPolitics columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of iPolitics.

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Evan Fraser is the director of the Arrell Food Institute at the University of Guelph. Mike Von Massow is the chair in food system leadership with the University of Guelph's Department of Food and Agricultural Resource Economics.